PSD2

What is PSD2?

The PSD2 Financial Directive entered into force on January 13, 2018, repealing Directive 2007/64/EC (PSD1). Far more encompassing than the previous PSD1 licensing, PSD2 further broadened the assault on the banking world by Fintech companies. Colloquially known as the Open Banking Directive, PSD2 banking Licenses permit tech companies to commence the unbridled disruption of the banking industry, allowing a hard pivot towards becoming payment institutions and broadening digital based financial services. Central Banks grant authorization for companies to operate as payment institutions, a move that has seen the big tech giants significantly expand their financial services offerings and further expunge the line between Highstreet banks and the Fintech sector.

While few companies meet the stringent capital and security criteria imposed by the maximum banking authorities of the nation’s able to grant these licenses, a handful of companies have managed to obtain the prestigious license over the past few years. These are:

The introduction of PSD2 is designed to bring more competition to the payments sector, particularly among non-traditional banks. Consequently, there has been a significant rise in the number of neo-banks and big tech firms seeking regulatory approval to operate banking and payment services. PSD2 enables Fintech’s; large technology firms, nonconventional banks, and even certain retail organizations to go head-to-head with big-name banks as PSPs (payment service providers). PSD2 further aims to provide lower costs and higher security for consumers and to afford payment service providers greater flexibility to differentiate customer experiences, including digital payments.

RevoluPAY, the company’s wholly owned subsidiary, was granted this prestigious license. RevoluPAY met all central bank: financial, structural, compliance and technological requirements in order to be granted the PSD2 license. During the lengthy 18 months between PSD2 license petition and approval RevoluGROUP built the proprietary Fintech infrastructure required to fully capitalize upon the eventual granting of the license, which occurred in May 2020. RevoluGROUP now has no less than 9 separate revenue verticals, many of which have been launched and generating sizeable revenue under a strictly reduced sandbox-imposed processing limit. This limit has now been definitively eliminated since the important PSD2 license was granted. With the PSD2 license RevoluGROUP may now undertake unlimited transaction volumes, allied to a recognition within the broader banking community, which allows client data sharing, fundamental relationships and, the expansion into new disruptive banking horizons.

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